Massachusetts MLO flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Massachusetts MLO license statute

M.G.L. c. 255F is the Massachusetts statute that licenses mortgage loan originators and authorizes the Division of Banks to regulate residential mortgage origination activity.

SAFE Act pre-licensure education

Twenty hours of NMLS-approved pre-licensure education are required: three hours federal law, three hours ethics, two hours non-traditional lending, and twelve hours general mortgage origination.

Annual continuing education hours

Eight hours per year are required: three hours federal law and regulation, two hours ethics including fraud and consumer protection, two hours non-traditional lending, and one hour Massachusetts law.

RESPA Section 8

Prohibits giving or receiving anything of value in exchange for referrals of settlement service business and prohibits splitting fees for services not actually performed.

Loan Estimate delivery deadline

The Loan Estimate must be delivered or placed in the mail within three business days after the borrower submits a complete application.

Closing Disclosure waiting period

The borrower must receive the Closing Disclosure at least three business days before consummation; a changed APR beyond tolerance triggers a new three-day wait.

Massachusetts 209 CMR 42

The Division of Banks regulation that sets licensing and conduct standards for mortgage lenders and brokers in Massachusetts.

NMLS renewal cycle

Massachusetts licenses renew annually through NMLS, typically between November 1 and December 31; failure to renew requires a new application.

Six pieces of application

Borrower name, monthly income, Social Security number, property address, estimated value, and loan amount sought; once all six arrive, the Loan Estimate clock starts.

Front-end debt ratio

PITI divided by gross monthly income; it measures the share of income consumed by the housing payment alone.

Back-end debt ratio

All monthly debt obligations, including the housing payment, divided by gross monthly income; it measures total debt burden.

PITI components

Principal, interest, property taxes, and hazard insurance; HOA dues, mortgage insurance, and flood insurance are added where applicable.

Notice of Incomplete Application

Sent within 30 days when a file is not complete; it lists missing items and permits the lender to stop the application timeline.

Appraisal delivery rule

The borrower must receive a copy of the appraisal promptly and no later than three business days before closing, unless the borrower waives the timing.

Adverse action notice

Required within 30 days of a completed application that is denied; it must state the reasons and the borrower's rights under ECOA.

Changed circumstance

An event such as new information or a changed loan term that permits a revised Loan Estimate beyond the original three-business-day window.

Clear-to-close

The underwriting stage where all conditions are satisfied and the file is authorized for closing and disbursement.

Conforming loan limit

The maximum loan amount eligible for Fannie Mae or Freddie Mac purchase; the 2024 baseline is $766,550, with higher limits in high-cost areas.

FHA upfront MIP

A mortgage insurance premium typically equal to 1.75 percent of the base loan amount, financed into the loan or paid at closing.

VA funding fee

A fee paid by the veteran at closing that varies by down payment amount and whether the borrower is a first-time user.

USDA rural loan

A loan for eligible rural properties that allows 100 percent financing and charges an upfront guarantee fee plus an annual fee.

Fully indexed rate

The interest rate on an adjustable-rate mortgage calculated as the index value plus the lender's margin at any adjustment date.

ARM periodic cap

The maximum amount the interest rate may change at any single adjustment date; the lifetime cap limits total increases over the loan term.

Reverse mortgage eligibility

A HECM is available to borrowers age 62 and older; it is non-recourse but requires the borrower to pay taxes, insurance, and HOA.

MassHousing programs

Massachusetts Housing Partnership loans offer down payment assistance and first-time buyer products for low- and moderate-income borrowers.

Fifteen-year amortization

A fixed-rate loan repaid over 15 years; it carries a lower rate but a higher monthly payment than a 30-year loan.

Massachusetts c. 93A

The Massachusetts consumer protection statute prohibiting unfair or deceptive acts or practices; violations can carry multiple damages and attorney's fees.

FCRA permissible purpose

A credit report may be pulled only for a permissible purpose such as a credit application, and adverse action must identify the reporting agency used.

HMDA data collection

Requires reporting of applicant race, ethnicity, sex, age, and loan pricing to detect discrimination and redlining in mortgage lending.

Massachusetts WISP

Under 201 CMR 17.00, entities holding personal information must maintain a written information security program with safeguards for nonpublic data.

ECOA protected classes

Race, color, religion, national origin, sex, marital status, age, public assistance receipt, and good-faith exercise of consumer credit rights.

Qualified written request

A servicer must acknowledge a borrower's QWR within five business days and respond substantively within 30 business days, extendable by 15.